Consumer Transparency on MRI Costs Saved $220 Per Test in Overall Costs, Increased Competition among Hospitals

  Consumer Transparency on MRI Costs Saved $220 Per Test in Overall Costs,
  Increased Competition among Hospitals

Business Wire

INDIANAPOLIS -- August 4, 2014

Consumers who chose less expensive MRIs after receiving price information
helped save $220 per test in total health system costs, according to a study
published in the August edition of Health Affairs.

The study also showed that this awareness was linked to a shift in consumer
behavior, decreasing the use of high-cost hospital-based MRIs and ultimately
reducing price variation between hospital and non-hospital facilities for
consumers. The $220 in savings represents a combination of consumer
out-of-pocket expenses and health plan or employer medical costs.

The study, commissioned by WellPoint subsidiary, AIM Specialty Health, and
conducted by WellPoint health outcomes subsidiary, HealthCore Inc., reviewed
data from about 100,000 members in WellPoint affiliated health plans in the
Northeast, Midwest and Southeast from 2010 to 2012. Those in the program were
made aware by telephone of MRI imaging cost differences and alternative
providers with comparable capabilities close to their home when an order was
made to a facility of much higher cost than available alternatives.

About 61,000 health plan members were part of an education program
administered by AIM that makes health plan members aware of MRI imaging costs
and proactively shares relevant information about alternative providers close
to the member’s home. These program participants were compared to about 44,000
members who did not have the education program.

“The study showed that consumers are responsive to price information delivered
real time as they are making health care decisions,” said Sam Nussbaum,
WellPoint chief medical officer and executive vice president. “And, just as
encouraging, is how providers reacted to this shift in consumer
utilization–with more than 30 hospitals voluntarily negotiating with our
affiliated health plans to lower their MRI pricing to stay competitive in the
marketplace.”

Between 2010 and 2012, the average MRI price in the member group that did not
have the education program went up by $125, while it decreased by $95 in the
group with price transparency and education, creating a net health system
savings of $220 per test. The price for hospital-based MRIs decreased by $175
per test after the program was implemented — an indication of a provider
response, as well as a shift in consumer behavior.

Price variation in health care services has been at the forefront of health
care discussions for several years. For example, price variation for imaging
scans is widely documented with at least one study showing that MRI scans can
vary in price from $300 to $3,000 with no demonstrated difference in
quality.^i

“We did see a modest decrease in costs to consumers for their out-of-pocket
expenses, however cost reductions varied widely corresponding with a wide
range of benefit plan designs,” said Andrea DeVries, senior author and
HealthCore director of payor and provider research. “At least 30 percent of
those in the program group had no cost sharing at all, making the findings all
the more striking.”

As consumers continue to embrace insurance products with lower premiums and
higher deductibles, out-of-pocket costs per procedure or service are expected
to rise. Generally, about 15 percent of those who are part of the AIM
outreach, decide to go with an alternative provider.

“Members have traditionally been responsible for only a small portion of a
procedure’s costs,” said Brandon Cady, president of AIM. “As costs have risen,
so has member cost share, but members don’t typically have efficient ways of
comparing prices before receiving health services. This program reinforced to
us that once members are made aware of similar services at a lower cost, they
will often choose the lower cost service.”

The member education program also had a spillover effect in reducing prices
for MRIs of members who did not have information on costs in those same
communities because many hospitals renegotiated prices that later positively
impacted all members getting MRIs at those facilities.

_________________

^i Hussey PS, Wertheimer S, Mehrota A. The association between health care
quality and cost: a systematic review. Ann Intern Med. 2013;158(1):27–34

About WellPoint, Inc.

WellPoint is one of the nation’s leading health benefits companies. We believe
that our health connects us all. So we focus on being a valued health partner
and delivering quality products and services that give members access to the
care they need. With nearly 69 million people served by our affiliated
companies including more than 37 million enrolled in our family of health
plans, we can make a real difference to meet the needs of our diverse
customers. We’re an independent licensee of the Blue Cross and Blue Shield
Association. We serve members as the Blue Cross licensee for California; and
as the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia,
Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City
area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee
in 10 New York City metropolitan and surrounding counties and as the Blue
Cross or Blue Cross Blue Shield licensee in selected upstate counties only),
Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.),
and Wisconsin. In most of these service areas, our plans do business as Anthem
Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of
Georgia and Empire Blue Cross Blue Shield, or Empire Blue Cross (in the New
York service areas). We also serve customers in other states through our
Amerigroup and CareMore subsidiaries. To find out more about us, go to
wellpoint.com.

About AIM

AIM Specialty Health^® is focused on driving appropriate, safe and affordable
care through the healthcare system. For more than 35 million members covered
across 50 states, D.C. and US territories, AIM targets the quality and cost of
clinical services including radiology, cardiology, oncology, specialty drugs
and sleep medicine. As a national leader in specialty benefits management, AIM
helps health plans, providers and employers focus on the value of health
decisions with an integrated suite of solutions combining clinical excellence,
technology and superior customer service. AIM is a wholly owned subsidiary of
WellPoint, Inc. (WLP). www.aimspecialtyhealth.com.

About HealthCore, Inc.

HealthCore, based in Wilmington, Del., is the clinical outcomes research
subsidiary of WellPoint, Inc. HealthCore has a team of highly experienced
researchers including physicians, biostatisticians, pharmacists,
epidemiologists, health economists and other scientists who study the “real
world” safety and effectiveness of drugs, medical devices and care management
interventions. HealthCore offers insight on how to best use this data and
communicates these findings to health care decision-makers to support
evidence-based medicine, product development decisions, safety monitoring,
coverage decisions, process improvement and overall cost-effective health
care. For more information, go to www.healthcore.com.

Contact:

WellPoint, Inc.
Lori McLaughlin, 317.407.7403
lori.mclaughlin2@wellpoint.com
 
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